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Libbey's International Sales Help Push Growth in Third Quarter (posted 11/13/08)

November 13, 2008
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Libbey Inc. recently announced sales growth for the third quarter and first nine months of 2008, fueled by strong gains in international sales. “While we are certainly not satisfied with our performance in the third quarter, we are proud of what we accomplished despite the state of the global economic markets,” said John F. Meier, chairman and chief executive officer. “We remain convinced that these results are a strong indication of the health of our business and the strength of our brands.”

For the quarter ended September 30, 2008, sales increased 4.5% to $211.5 million from $202.4 million in the year-ago quarter. The increase in sales included a 17.4% increase in International sales, as sales to Crisal and Royal Leerdam glassware customers increased 15.5 and 4.1%, respectively, and Libbey China had sales growth of over 150.0%. Excluding the currency impact, International sales increased approximately 10.4%. In addition, North American Glass sales increased 1.9%, benefiting from more than a 6.0% increase in shipments to U.S. and Canadian retail glassware customers. Shipments of Crisa glassware were up 2.7%, and sales to foodservice glassware customers were down 1.7%. North American Other sales decreased 3.6%, as a 10.9% decrease in shipments of World Tableware products more than offset the single-digit sales growth of Syracuse China and Traex products.

The company reported income from operations of $14.6 million during the quarter, compared with income from operations of $14.7 million in the year-ago quarter. Higher sales and lower selling, general and administrative costs were offset by increased natural gas and distribution costs.

For the nine months ended September 30, 2008, sales increased 5.9% to $623.6 million from $589.0 million in the year-ago period. International sales increased 22.9% as a result of significantly increased shipments to customers of Libbey China and favorable currency impact on European sales. Excluding the currency impact, International sales increased approximately 9.4%. In addition, North American Glass sales increased 3.3%, benefiting from more than a 9.0% increase in shipments to U.S. and Canadian retail glassware customers. Shipments of Crisa glassware were up 8.1% and sales to foodservice glassware customers were down 4.9%. North American Other sales decreased 2.6%, primarily as the result of lower sales of Syracuse China products.

Libbey reported income from operations of $42.8 million during the first nine months of 2008, compared with income from operations of $45.6 million during the year-ago period. Factors contributing to the decline in income from operations were lower foodservice sales; lower production activity in Mexico, as a result of a scheduled furnace rebuild; and higher natural gas costs, partially offset by increased total sales.

“As we announced on October 16, 2008, based on the expected continuing weaknesses in the Mexican peso, consumer confidence and the foodservice channel, we expect fourth quarter 2008 sales in the range of $210.0 million to $220.0 million and EBITDA between $20.5 million to $23.5 million,” said Meier. “Based on this fourth quarter outlook, we expect full year 2008 sales in the range of $833.0 million to $843.0 million and EBITDA in the range of $97.0 million to $100.0 million. While we are still in the process of completing the 2009 budget, we have identified $20 to $23 million of cash flow enhancements that we expect to achieve in 2009. These include a number of cost reduction initiatives, led by capital expenditure reductions.”

Additional details are available at www.libbey.com.

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